Mercer KiwiSaver scheme - Regulatory update

The Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill (‘Tax Bill’), which became law in March 2019, made a number of changes to the KiwiSaver Act.

The Tax Bill included regulatory relief from the requirement to update product disclosure statements to reflect those changes, and they are not currently referenced in the product disclosure statement dated 11 September 2018 for the Mercer KiwiSaver scheme.

The changes are outlined below:

Tax Bill changes affecting the Scheme

Date change takes effect

New KiwiSaver contribution rates of 6% and 10% (in addition to the existing rates of 3%, 4% and 8%).

1 April 2019

Reducing the maximum contributions holiday period from five years to one year, and changing the name from ‘contributions holiday’ to ‘savings suspension’.

1 April 2019

Permitting individuals who have reached the New Zealand superannuation qualification age (currently 65) to opt-in to KiwiSaver, and corresponding rules providing that employers of such people are not required to make employer contributions to a KiwiSaver scheme for them.

Such individuals will not be eligible to receive member tax credits or compulsory employer contributions.

1 July 2019

Removing the five-year ‘lock-in’ period (which requires members joining KiwiSaver after the age of 60 to wait five complete years before accessing their savings) for members who join on or after the date this change takes effect (existing members will remained locked in).

1 July 2019

Existing members and individuals who join KiwiSaver before 1 July 2019, who would otherwise be prevented from making a retirement withdrawal by the five-year lock in period, may opt out of the five year lock-in period.

Note that a consequence of opting out means the member will cease to be eligible to receive member tax credits and compulsory employer contributions.

1 April 2020



As a consequence of the Tax Bill changes, members who join KiwiSaver on or after 1 July 2019 who are aged 60 years or older will only be eligible to receive member tax credits until they turn 65. Previously, they would have been locked-in for five years and would have been eligible to receive member tax credits until the end of the lock-in period. Those who join before 1 July 2019 will still be eligible to receive member tax credits until they turn 65 or have been a member for five years, whichever date occurs last. However, if the member turns 65 and exercises their right to opt out of the lock-in period (this right becomes available from 1 April 2020), that member will cease to be eligible to receive member tax credits from the date that opt-out takes effect.

If you would like further help navigating your rights and benefits in the scheme, please contact 0508 637237. For further information about this regulatory update, please visit

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